North Sea-focused oil and gas explorer Parkmead (PMG) has agreed to take over Lochard Energy (LHD) in an all-share deal worth £14.5m. Lochard’s principal asset is its 10 per cent interest in the Athena oil field in the North Sea. Lochard’s net production from the field amounts to approximately 1,100 barrels of oil-equivalent per day, which would nearly quadruple Parkmead’s production.
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The economics of the transaction look good – predictable, given the reputation of Parkmead's executive chairman, Tom Cross of Dana Petroleum fame, as a shrewd deal-maker. Lochard's Athena interest generated operating cashflow of $13.9m (£9m) in the second half of 2012, so the deal could pay for itself in a year.
